Legal News & Views

In Omkara Asset Reconstruction Pvt. Ltd. vs Resolution Professional of Unimark Remedies Ltd., the application was filed by the applicant before the NCLT, Mumbai in the ICICI Bank Limited Vs. Unimark Remedies Ltd.. The applicant's objection was against the decision of the COC in refusing to open the envelop of the Resolution Plan sent by the Applicant and to return the same to the Applicant without considering the resolution plan on its merits. The Respondent defended their decision stating that pursuant to section 25(2)(h) of the code, the RP had issued advertisement on 08.06.2018 inviting EOI from prospective resolution Applicants. The last date for submission of EOI was extended thrice by announcement made on the website of the Corporate Debtor that is on 28.06.2018, 19.07.2018 and 17.08.2018. It is further submitted that the request for resolution plans (RFRP) inviting resolution plans from Resolution Applicants was published on the website of the Corporate Debtor on 16...

In KIIC Investment Company (Taxpayer),  the Taxpayer was a Mauritius-based investment company, holding substantial interest in Indian companies, I Co 1, I Co 2 and indirectly, in I Co 3. During the tax years under consideration, I Co 1 had placed Inter Corporate Deposits (ICDs)  with I Co 2 and advanced amounts to I Co 3.  The Indian Tax Authority treated both the ICDs and advances  as deemed dividend under the ITL, taxable in the hands of the Taxpayer, being common shareholder in both the parties to the ICD/ advance. The Mumbai Income Tax Appellate Tribunal (Tribunal) observed that deemed dividend provision of the ITL should be strictly interpreted since it taxes dividend on an artificial basis.  Based on the board resolution/ financial statements of I Co1 and terms of ICD agreement between I Co 1 and I Co2, the Tribunal held that the amount advanced by I Co 1 to I Co 2, is in the nature of a deposit and not a loan. Hence, such amounts cannot be ...

In Vinod Soni and others (Taxpayer) v. ITO, the issue before the Delhi Income Tax Appellate Tribunal was whether any withholding obligation triggers on the joint buyers if the cost of the immoveable property is more than specified limit of INR5M but the share of each co-owner is less than that value. Income tax laws cast an obligation on the buyer to withhold tax on payment to seller of consideration for transfer of immoveable property if value of consideration exceeds INR5M. The Tribunal held that in a case of joint acquisition of an immovable property by various co-owners, the threshold limit of withholding obligation (i.e. INR5M) is applicable with reference to share of each co-owner and not with reference to consideration of entire property. Accordingly, the Tribunal deleted tax withholding demand raised on co-owners by the Tax Authority. Article referred: https://www.ey.com/Publication/vwLUAssets/delhitrib/%24FILE/delhitrib.pdf

In the case of Periar Trading Company Private Limited (Taxpayer), the issue before the Mumbai Income Tax Appellate Tribunal (Tribunal)  was whether conversion of compulsory convertible preference shares (CCPS) into equity shares can be treated as “transfer” as per India Tax Laws (ITL) and whether the difference between the cost of acquisition of CCPS and market value of equity shares on the date of conversion attract capital gains taxation as per the ITL. The dispute involved in this case pertains to tax year prior to insertion of specific provision in the ITL which exempts such a conversion. The Tribunal held that conversion of CCPS into equity shares cannot be regarded as an exchange, barter or swapping of one form of shares for other form. Rather, it is a case where the original shares (CCPS) ceased to exist upon its conversion into other form of shares (equity), not constituting a “transfer” and, hence, does not attract capital gains. The Tribunal placed reliance on a...

In Akhil Bhartvarshiya Marwari Agarwal Jatiya Kosh vs Brijlal Tibrewal & Ors., the trial court, while decreeing the suit filed by the plaintiff, had only directed the defendant to convey the title and execute document in favour of the society in respect of Suit Building and land to the extent of Suit Building, which was 1009.70 sq. meters. Dismissing the appeals, the high court had directed the defendant to execute the Deed of Conveyance to the extent of 2700 sq. meters of land. On appeal, the Supreme Court observed that the Appellants-original Defendants cannot be put in a worse condition than beyond the judgment and decree passed by learned Trial Court which was appealed before the First Appellant Court and that too in the absence of any cross-appeal or cross objection by the original Plaintiffs. Therefore also, the impugned orders passed by the High Court which, as such, will go beyond the judgment and decree passed by the learned Trial Court are not sustainable, more parti...

In Lalit Mishra & Ors. Vs Sharon Bio Medicine Ltd. & Ors., the Appellants/promotors challenged the approval of the Resolution Plan on the grounds that the Appellants/promoters were the shareholders and for them no amount has been provided under the ‘Resolution Plan’; and that some of the Appellants/promoters are also ‘personal guarantors’ who have been discriminated. It was submitted by the Appellants/promotors that the lenders have not been treated similarly and restructuring for its entire claims of the ‘Corporate Debtor’ is against the provisions of the ‘I&B Code’ and that the security interest which include the personal guarantees of the Appellants have been reduced to ‘nil’ and thereby the ‘Resolution Plan’ have been submitted against the provisions of Sections 133 and 140 of the ‘Indian Contract Act’. The NCLAT opined that it was not the intention of the legislature to benefit the ‘Personal Guarantors’ by excluding exercise of legal remedies available in law ...

In HORLICKS LTD. vs HEINZ INDIA PRIVATE LIMITED, a suit filed by Horlicks Ltd for damages and permanent injunction restraining infringement, disparagement and unfair trade practices against HEINZ India Private Limited (Complan) as the advertisement by Complan had compared one cup of COMPLAN with two cups of HORLICKS and claimed that one cup of COMPLAN has the same amount of protein as two cups of HORLICKS. The court held that the COMPLAN advertisement is not misleading and there is no denigration or disparagement of Horlicks. The court also held that the primary objective of Sections 29(8) and 30(1) of the Trade Marks Act, 1999, is to allow comparative advertising as long as the use of a competitor’s mark is honest and that the failure to point out a competitor’s advantages is not necessarily dishonest. The court also opined that advertisement is a facet of commercial speech which is protected by Article 19(1)(a) of the Constitution. The same can be restricted only in accordan...

In Gur Dayal V. State of J&K, the petitioner had prayed for quashing of criminal proceedings as there was pending civil suits on the same issue. The J & K High Court referring to various judgments held that in a given case, civil proceedings and criminal proceedings can proceed simultaneously. In every criminal proceeding there would be some element of civil in nature. In this way, it cannot be universally said that where the civil litigation between same parties with regard to same subject, criminal proceeding cannot be initiated with regard to same subject. If it is universally applied that pendency of a civil litigation between parties are sufficient for quashing the criminal proceedings, the unscrupulous litigants, apprehending criminal action against them, would be encouraged to frustrate the course of justice and law by filing suits with respect to the documents intended to be used against them after the initiation of criminal proceedings or in anticipation o...

In R.V. Prasannakumaar v. Mantri Castles (P) Ltd., the main issue that arose before the NCDRC was whether any sort of interference was called for in the review petition filed by the petitioner. The Commission observed that Section 22(2) of the Consumer Protection Act, is limited to the error apparent on the face of the record. The Commission then referred to the Supreme Court judgments of Union of India v. Sandur Manganese and Iron Ores Ltd., and S.Bagirathi Ammal v. Palani Roman Catholic Mission, wherein it was held that the power of review cannot be exercised solely on basis that the parties do not agree with the view of the judgment, as long as the point is already dealt with and answered, parties are not entitled to challenge the impugned judgment in the guise that an alternative view is possible under review jurisdiction. Under the review jurisdiction, rehearing of issues is not allowed but the same issues can be decided just by a perusal of the records and if a prima fac...

In Jitendra Naik v. Radhyashyam Naik, the question before the Orissa High Court is that an order rejecting a memorandum of appeal or dismissing an appeal following rejection of an application under Sec.5 of the Limitation Act for condonation of delay in preferring the appeal is a decree or order ? The court referring to the judgment of the Supreme Court in Shyam Sundar Sarma vs Pannalal Jaiswal And Others, an appeal filed along with an application for condonation of delay in filing that appeal when dismissed on refusal to condone the delay is a decree within the meaning of Section 2(2) of the Code of Civil Procedure.

In STATE OF TAMIL NADU & ANR. vs M. MANGAYARKARASI, the high court had interfered with the punishment of removal from service imposed on two employees on the ground that it was shockingly disproportionate. Though the state contended that quantum of loss caused due to the production of bogus bills in the case of the two employees was substantially higher compared to other employees who were only subjected to a lenient punishment of stoppage of increments, the court observed that it would have to consider only the nature of the charge and not the quantum involved. On appeal, the Supreme Court, disagreeing with this approach, observed that the high court ought to have noticed that the gravity of misconduct which was established against these two employees was distinct from and of a more serious nature than what was found against the other employees and also held that the imposition of a penalty in disciplinary proceeding lies in the sole domain of the employer. Unless the pen...

In Commissioner of Central Excise and Service Tax, Noida vs. Sanjivani Non-Ferrous Trading Pvt.Ltd.), the authority had rejected the declared value in the Bills of Entry and reassessment was done by increasing the assessable value. The tribunal had set aside the reassessment and the Revenue had approached the apex court. The Supreme Court held that normally, the Assessing Officer is supposed to act on the basis of price which is actually paid and treat the same as assessable value/transaction value of the goods. This, ordinarily, is the course of action which needs to be followed by the Assessing Officer. The court also explained when such a declared value can be discarded. It observed that the transaction value mentioned in the Bills of Entry can be discarded in case it is found that there are any imports of identical goods or similar goods at a higher price at around the same time or if the buyers and sellers are related to each other. In order to invoke such a provision it ...

In MUNICIPAL CORPORATION OF GREATER MUMBAI vs PRATIBHA INDUSTRIES LTD. & ORS., a single bench of the Bombay High court initially ordered appointment of an arbitrator. Later the judge realised that the agreement had no arbitration clause, and recalled the said order. On appeal by the other party, the Division bench held that since there is no provision in Part I of the Arbitration and Conciliation Act, for any court to review its own order, the review petition filed before the Single judge was not maintainable. On appeal the Supreme Court disagreed with the division bench view and referring to judgments in National Sewing Thread Co. Ltd. v. James Chadwick & Bros., Shivdev Singh & Ors. v. State of Punjab and M.M. Thomas v. State of Kerala decided that it is clear that these constitutional courts, being courts of record, the jurisdiction to recall their own orders is inherent by virtue of the fact that they are superior courts of record.

In HDB FINANCIAL SERVICES LIMITED vs M/S. REMO SOFTWARE PVT. LTD, the matter pertained Section 14 proceedings initiated by banks against few tenants, who were possessing the secured assets on lease. Challenging the SARFAESI proceedings initiated against them, they approached the High Court. The Single Judge disposed of the writ petition, directing them to approach the DRT against the proceedings within two weeks under Section 17(4A) of the Act. The proceedings were kept in abeyance for two weeks based on the undertaking made by the bank. Going further, the Single Judge also held that even the borrower had to be heard before issuing directions under Section 14. Challenging this direction regarding borrowers, appeal was before before the Division Bench. The High Court of Karnataka referring to the judgments in Harshad Govardhan Sondagar vs. International Assets Reconstruction Company Limited and Vishal N. Kalsaria vs. Bank of India and Ors, has held that borrower ha...

In Mrs.Elsamma vs THE KADUTHURUTHY URBAN CO OPERATIVE BANK LTD., an application for permanent injunction as originally filed by the appellants restraining the defendants from trespassing or otherwise taking possession of the unsecured Schedule A property which according to the appellants were adjacent to the secured property Schedule B. The defendants objected to maintainability of the suit on the ground that the suit is barred under Section 34 of the SARFAESI Act which was allowed by the trial court and  the lower appellate court. The appellants argued in favour of maintainability citing KHDFC Bank Ltd. and others v. Prestige Educational Trust while as per the respondents the afore- cited decision is no longer good law in view of Jagdish Singh v. Heeralal. The Kerala High Court while approving the judgment in the KHDFC Bank Ltd.case decided that the said judgment does not clash with the judgment in the Jagdish Singh and said in summing up:- (i) The ...

In M/S. EMAAR MGF LAND LIMITED vs AFTAB SINGH, review petition was filed against the decision of the Supreme Court to allow the order of the NCDRC in rejecting the application filed by the appellant under Section 8 of the Arbitration Act. Originally the respondent had filed an application before the NCDRC which was objected to by the appellant as an arbitration clauses existed in the agreement between the parties. The NCDRC referred the matter to a larger bench which decided that an Arbitration Clause in the afore-stated kind of Agreements between the Complainants and the Builder cannot circumscribe the jurisdiction of a Consumer Fora, notwithstanding the amendments made to Section 8 of the Arbitration Act. Hearing the review petition, the Supreme Court clarified that in the event a person entitled to seek an additional special remedy provided under the statutes does not opt for the additional/special remedy and he is a party to an arbitration agreement, there is no inhibition...

In IDBI BANK LTD vs JAYPEE INFRA TECH LTD., application was filed by the IRP before the Allahabad Bench of the NCLT, seeking certain directions regarding compliance with Regulation 13(2) of Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. Following Supreme Court's direction to include homebuyers in the committee of creditors, while displaying the details of allottees of real estate project of JIL on the website, IRP mentioned the unique code number assigned to the allottees instead of giving their names. According to the IRP, the investment in flats or plots of land by allottee is information private to the allottees and displaying their names and other personal details without their consent may amount to breach of privacy of any allottee which was opposed by IDBI and other creditors.  The object of directing the JRP to publish the list of the creditors containing the names of the creditors along with the amo...

In Rajasthan Housing Board vs. Chandi Bai, the Supreme Court while setting aside a judgment of the Rajasthan High Court observed that a civil suit to question notification issued under Section 4 and declaration under Section 6 of the Land Acquisition Act, 1894 is not maintainable and only remedy left to the aggrieved party is to file a writ petition before the high court under Article 226 of the Constitution of India or to approach the Supreme Court.

In JAIPUR METALS & ELECTRICALS EMPLOYEES ORGANIZATION vs JAIPUR METALS & ELECTRICALS LTD., appeal was filed before the Supreme Court against the refusal of the Rajasthan High Court to transfer winding up proceedings pending before it to the National Company Law Tribunal and set aside the NCLT order declaring a moratorium in terms of Section 14 of the Code and appointing an interim resolution professional. The Supreme Court has held that winding up proceedings under the Sick Industrial Companies (Special Provisions) Act 1985 will continue in the High Court and not the National Company Law Tribunal, until an application for transfer to NCLT is filed by a party under Section 434(1)(c) of the Companies Act 2013. Therefore the Supreme Court decided that the High Court judgment, therefore, though incorrect in applying Rule 6 of the 2016 Transfer Rules, can still be supported on this aspect with a reference to Rule 5(2) of the Companies (Transfer of Pending Proceedings) Rules 201...

In Rajendra Pralhadrao Wasnik vs State of Maharashtra, death sentence imposed by the Trial Judge was opposed by the appellant. One of the grounds relied upon by the Trial court was the fact that there are two other cases pending against the appellant under similar provisions of law and he expressed the opinion that the pendency of those cases is a circumstance against the appellant. The appellant also opposed the imposition of death penalty on circumstantial evidence. On the issue of circumstantial evidence, the Supreme Court after looking into various judgments decided that ordinarily, it would not be advisable to award capital punishment in a case of circumstantial evidence. But there is no hard and fast rule that death sentence should not be awarded in a case of circumstantial evidence. On the issue of pendency of cases, the Supreme Court opined that it is quite clear that the mere pendency of one or more criminal cases against a convict cannot be a factor for considerati...

In PRAKASH CHAND DAGA vs SAVETA SHARMA & ORS., the appellant, original owner of a Santro Car sold said vehicle to Ms. Saveta Sharma, first respondent on 11.09.2009. According to the appellant, after receiving due consideration, the possession was transferred to said first respondent. An accident occurred on 09.10.2009 in which one Rakesh Kumar, second respondent, received injuries. Since the liability was fastened on the driver and first respondent, the aforesaid decision was challenged by them in the High Court which found that despite the sale of the vehicle on 11.09.2009, no transfer of ownership, in accordance with Section 50 of the Motor Vehicles Act, was effected and as such the appellant continued to be the owner in terms of definition as incorporated in Section 2(30) of the Act. Relying on the decision of this Court in Naveen Kumar vs. Vijay Kumar and others, the High Court decided that that the Insurance Company is liable to make the compensation to the claimant and t...

In Naman Pratap Singh vs. State of Uttar Pradesh, a student had lodged a complaint with the Sub-Divisional Magistrate, Unnao that she had been duped into taking admission in an unrecognised institute. The Executive magistrate, on the same day, directed the police to register a first information report and thus an FIR was registered. The Supreme Court on appeal referring to the Section 154, 190 & 156(3) of the Code of Criminal Procedure, held that it is apparent that in the scheme of the Code, an Executive Magistrate has no role to play in directing the police to register an F.I.R. on basis of a private complaint lodged before him. If a complaint is lodged before the Executive Magistrate regarding an issue over which he has administrative jurisdiction, and the Magistrate proceeds to hold an administrative inquiry, it may be possible for him to lodge an F.I.R. himself in the matter. In such a case, entirely different considerations would arise. A reading of the F.I.R. reveal...

In Hukum Chandra vs. Nemi Chand Jain, the landlord had filed suit under Section 12(1) (f) of the Madhya Pradesh Accommodation Control Act, 1961, seeking eviction of the tenant from the suit shop on the ground of bona fide requirement to settle his son. The trial court dismissed the suit holding that the son was already doing an independent business of utensils and he was not unemployed. The 1st appellate court reversed these findings and held that it would be inappropriate to expect that the landowner should sit idle and not to perform any work till the suit for eviction is decided on the basis of bona fide requirement. The high court also affirmed the findings of the 1st appellate court holding that the landlord has established the bona fide requirement for establishing business for his son. Upholding the findings of 1st appellate court and high court, the bench held that in the present case, mere fact that Rajendra Kumar was involved in the business of utensils – “Rajendra B...

In INDIABULLS HOUSING FINANCE LTD vs VAIBHAV JHAWAR AND ORS., the Delhi High Court,upheld a decision passed by the Debt Recovery Appellate Tribunal, to hold that the provisions of Section 18 of the SARFAESI Act, are determinative of the fact that the legislature intended that it is only the borrower and the guarantor, who should be under obligation to make the pre-deposit.

In V. Ravi Kumar vs. State, the Madras High Court had quashed the complaint observing that the complainant had, without assigning any reason, withdrawn the first complaint and launched prosecution by filing a fresh complaint; that the complaint arose out of a commercial transaction; and that the complainant would have to approach the Civil Court for recovering dues if at all arising out of commercial transaction. The Supreme Bench observed that there is no provision in the Criminal Procedure Code or any other statute which debars a complainant from making a second complaint on the same allegations, when the first complaint did not lead to conviction, acquittal or discharge. Referring to Jatinder Singh and Others v. Ranjit Kaur, the bench said that it is only when a complaint is dismissed on merits after an inquiry that a second complaint cannot be made on the same facts.